Prime Minister Kristen Michal announced at the government press conference on September 18 that the planned two percentage point income tax increase scheduled to take effect at the beginning of 2026 will be abandoned.

The decision was made as part of budget negotiations. Initially, it was planned to raise the personal and corporate income tax to 24 percent.

Tax arrears interest rate in Estonia is 0.06% per day, which is 21,9% year.

If the tax debt is below 0.5 EUR, it is rounded as 0 EUR.

The fundamental principle of intra-EU VAT accounting is the destination principle – services and goods are generally taxed in the country where they are consumed.

There will be changes to Estonian tax law, effective from July 1, 2025, and from January 1, 2026.

VAT Rate Increase: 22% → 24% (Effective from 01.07.2025)
Income Tax Rate Increase: 22% → 24% (Effective from 01.01.2026)

Individuals are considered tax residents if they spend more than 183 days in Estonia within 12 months or have a permanent home in the country...

Estonia has established a network of double taxation agreements (DTAs) with various countries to prevent the same income from being taxed in multiple jurisdictions....

The Digital Nomad Visa allows remote workers to live and work legally in Estonia while enjoying its digital infrastructure's benefits. However, there are significant tax implications to consider...

To become a tax resident in Estonia, an individual must meet at least one of the following criteria: Permanent Residence...

In Estonia, Value Added Tax (VAT) is a significant part of the tax system. Here’s a summary of the current VAT rates and exemptions in Estonia...

Individuals can earn up to €7,848 per year tax-free.

Estonia employs a flat income tax rate of 22% on personal income. This means that all individuals pay the same tax percentage regardless of income level. Starting from 01.01.2026 the income tax rate is 24%.

It's important to note that having an Estonian ID card does not automatically make you an Estonian tax resident. Some people mistakenly believe that if they receive a salary from an Estonian company

Under the Income Tax Act, income tax is imposed on payments for the use of copyrighted intellectual property, such as royalties. When a company in Estonia pays a royalty, it generally needs to withhold a license fee.

The Income Tax Act defines "costs of entertaining guests" as expenses incurred for providing catering, accommodation, transportation, or entertainment to guests and cooperation partners...

The tax-exempt limit for daily allowances during assignments abroad is 50 euros for the first 15 days of the assignment (15 days per calendar month at most) and

Fringe benefits are subject to income tax at the employer’s level at a rate of 22/78 and social tax at a rate of 33%. Social tax is levied on the amount that includes both income tax and non-deductible VAT...

With an A1/E101 certificate, a person who works outside the country where he/she has social security insurance can prove that he/she is covered under that

Payroll calculation sample: From the total cost 2676 EUR - 62.47% (1671.8 EUR) is received by the employee and 37.53% (1004.2 EUR) is paid in taxes.